Aestar LLC supervises the sale transactions, verifies legal documents, and insures real estate titles.
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To avoid probation, many people add their child’s name on the deed to their house. The disadvantages outweigh the advantage of avoiding probate. For example, you lose the control of your house; your child’s heirs or loved ones inherit your house, child’s creditors, and your gift tax. Additionally,
5. Capital Gain – Let’s assume that you bought the house in year 2000 at $100,000. You add your child’s name in 2010 such that it’s equivalent to the child’s buying the house at $50,000 and it’s not your child’s primary residence. If your child sells the house in 2020 at its then price $500,000 after you die, your child will have to pay capital gain tax on the half of the house $200,000=($500,000/2-$100,000/2). Instead, if your child inherits the house upon your death in 2020, the child will take the property at the then market value $500,000, assessed on your death date. It’s equivalent to the child’s buying the house at $500,000. Thus, if your child then sells the property for $500,000, there is no capital gains tax.
6. Medicaid Disqualification – to continue.
Contact me should you have further questions.
Jonathan Kan, Licensed Title Producer/Notary Public
Aestar Settlements LLC
15881-B Crabbs Branch Way, Rockville, MD 20855
C: 240-351-6098 F: 888-501-3060 E: [email protected]
www.aestar-settlements.com
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This column is not legal advice and should not be acted upon without obtaining your own legal counsel.
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